When people change jobs it can be easy to lose track of their pensions. The Government’s pension tracing service has shown that almost 207,000 calls were taken over the last four years relating to lost pensions.
In the modern day working landscape, it is not common for people to stay in the same job for their entire working life, with the average person having 11 different jobs in their career.
People could lose track of their pensions if they forget to tell their pension provider about a change of employment, and this problem appears to be getting worse. The Department for Work and Pensions (DWP) believes there could be up to 50 million lost pension funds by 2050.
These unclaimed pensions could soon be assigned to The Dormant Assets scheme, which was established in 2008 with the aim of distributing unclaimed assets from banks and building societies to social and environmental initiatives across the UK.
The Bill’s remit is to be expanded to include dormant assets from the insurance and pensions, investment, wealth management, and securities sectors. It has the potential to make around £880million available across the UK.
“The key is that if the pension investor comes back for the money, the scheme allows them to access their assets.
“A recent freedom of information request to DWP showed that almost 207,000 calls were made to the Government’s pension tracing service over the past four years.
“People lose track of their pensions when they change employers or move to a new home.
“They don’t keep their contact details up to date and so the provider cannot communicate with them – over time these pensions are forgotten about and people miss out on retirement income.
“This has been exacerbated by more people being automatically enrolled into a pension when they start a new job.
“Frequent job moves mean people can accumulate several small pensions over the course of their working life.”
“While 22 percent of those aged 55-64 with a pension said they had three or more pensions, this rose to one-third of 18-24- and 35-44-year-olds, recent Hargreaves Lansdown research has shown.”
“However, there is no need to lose track of pensions. File pension paperwork away safely and update your contact details whenever you move to a new house.
“If you do lose track of a pension, then contact the Government’s pension tracing service on Find pension contact details – GOV.UK (www.gov.uk) You will need either an employer name or pension provider but they will help you find your pension.”
Moving house is another event that can cause people to lose their pensions, with Britons moving home eight times during their lifetime on average. Failing to tell a pension provider about a change of address could mean people are unable to get their annual pension statements.
It can be easy for people with multiple pension funds to lose track of one or more of them, so consolidating these into fewer funds is a potential option which could make things simpler. However, some pension plans may provide specific additional benefits which people may want to hold onto.
Punter Southall Aspire found that around £20billion in pensions were believed to be lost or forgotten, with Britons potentially missing out on an average of £13,000.